Aussie Record Labels Demand $5 p/Member Gym Tax

Also wants almost $20,000 from restaurants up from $125, as it increases fees to play background music in cafes, restaurants, gyms, and everywhere else, but some say they’ll simply switch to classical music.

The record industry seems to get more desperate by the day as music fans switch from physical media to digital, so it’s no surprise to learn that it’s trying to extort a captive audience in Australia – the businesses, large and small, that play background music for customers.

The Phonographic Performance Company of Australia, a group representing more than 750 record companies, and which is the licensing body for the “broadcast, communication or public playing of recorded music,” is demanding a huge increase in the fees businesses pay per customer for the ability to play copyrighted music. In some cases the increase will be some 2000%!

Just how much are we talking?

Mid-sized restaurant (120 seats): from $125 to $19,344 a year.

Small restaurant (50 seats): from $84 to $16,016.

Cafe (50 seats): from $62 to $10,010.

Smaller cafe (30 seats): from $124 to $5864 a year.

Gyms: Up from 96 cents a class capped at $2600 a year to $4.54 per member a month.

It claims the amount they currently pay is extremely low and doesn’t fairly compensate the record labels, but if a restaurant’s licensing tab goes from $125 to $19,344 I’ll be amazed if any of them continue to play music, and if they do it’s certain to be added to the price of a customer’s meal (maybe there ought to be a music free option, where if you wear earmuffs you don’t have to pay the fee).

“The rates we have historically charged are barely nominal and we are looking to establish a fair return,” said PPCA chief executive Stephen Peach. “The cafe owner just has to ask if the music is worth it, and if it isn’t they don’t have to play it.”

Bill Healey, Director of national affairs for the Australian Hotel Association, says it’s pretty unfair for the record labels to try and save itself on the backs of businesses such as those in his industry, especially during the economic downturn.

“The multinational record companies are obviously trying to reposition the cost of music, but they don’t understand the economics of the businesses they’re targeting,” he said. “Businesses just won’t play music or they will play music that won’t incur a PPCA fee like classical music.”

One of the more maddening proposals is the $4.54 fee it would add to the price of a gym membership. It had previously been 96.8 cents per class for all the recorded music they play, which works out at just 4.8 cents per person in a class of 20 and 2.4 cents per person in a large class of 40. It now wants $4.54 from everybody.

“For decades, the highly profitable fitness sector has been paying a paltry amount to recording artists and labels for the music that is so crucial to their businesses,” stated Peach in a PPCA press release. “Imagine people working out in a silent fitness class and you can start to appreciate the valuable contribution that sound recordings make to the fitness industry.”

It likens the surcharge to the towel fee members pay, and says music is such an important part of fitness classes that the music industry should share in fitness center revenues, getting a 14% cut based on average membership fees.

“Artists are entitled to earn a fair income from their efforts and they should not have to subsidize a profitable industry,” added PPCA board member and former drummer for the Go-Betweens, Lindy Morrison. “Where music is used to add value, as it clearly does in the fitness sector, it should be recognized and artists properly rewarded. Music should not be considered as something that should be handed over for free, or next to nothing.”

Pretty frightening right? Since when did listening to someone’s music mean it was “handed over for free?” More importantly, as somebody who works out rather frequently, it makes me pretty angry that they’d try to tack on an extra $5 bucks a month to my gym membership, especially since I wear a portable MP3 player and don’t even listen to what it’s playing on the gym soundsystem.

“The PPCA wants a levy on each member, but when you go into a gym most people are listening to an iPod,” said Fitness Australia chief Lauretta Stace.

Exactly.

It’s no wonder that people are trading music illegally online, it seems to be the only way you can get around all the fees and restrictions, and it may just make a world, at least in Australia, where everybody dons iPods while they eat, or drink coffee.

The PPCA just won a in increase in the fee it can charge nightclubs, up 7 cents a person to $1.05,but is allowed to base the figure on venue capacity, not on the actual number of customers in the club on a given night. The same will be true of restaurants, cafes, gyms and other venues. The fee will be based on how many customers you could have, not on how many actually walk through the door.

The PPCA ought to really be ashamed of itself.

The case against fitness centers is currently being weighed by the Copyright Tribunal, and afterwards will review the cost of playing music in restaurants, cafes, and

Jared Moya
I've been interested in P2P since the early, high-flying days of Napster and KaZaA. I believe that analog copyright laws are ill-suited to the digital age, and that art and culture shouldn't be subject to the whims of international entertainment industry conglomerates. Twitter | Google Plus

There is an opportunity for the music to be offered free to businesses, and funded by advertising companies. I'm sure they could find buisinesses that would be happy to fund this media to launch there products to there target market.

Truly wtf. The record company's seem to have the wrong idea about the whole thing. There would be no reason for this if they made music cheap enough; CD from shop $30. Digital download $30. So with no manufacturing and distribution costs they charge the same amount?? Stupid, if they charged a much smaller fee everyone would pay = end of music copying period.

We used to have a small cafe, and I swapped to Magnatune. I now use it for online videos too. There are different licences and you KNOW the money actually goes to the artist (Not like the record companies). The wide variety of music handles most situations.
There were only a few days a year our cafe was full, and we could never afford a fee like the one proposed. If we want to keep music in society (and most of us do) then we have to find alternatives to the big IP squattocracy. I can feel a blog entry coming on.

What a slanted article. Don't forget that the Austrailian agency in question (despite it's name) is ALSO collecting performance monies for THE ARTISTS. Just like ASCAP and BMI do in America. How the the composers and artists got left out of this "greed" article is amazing. No... I'm not suggesting that artists are greedy, but you're saying this is all about record company greed. It's not. Bad work.

You're right I'm sorry, because artists hold such huge sway with record labels (WTF?).
Plus, some of these entities, like Soundexchange for example, collect the monies and then never distribute it to artists.
http://www.p2pnet.net/story/18864

Imagine working out in a gym without mirrors. Clearly, the fitness industry has profited on the backs of the mirror manufacturers. The mirror makers trade organization should institute a monthly charge based on the number of people able to see themselves in the mirrors. Otherwise mirrors may no longer be made! C'mon Jocks! BE fair!

These record companies are crazy, right now in these times companies are barely able to pay for their employees let alone music. amaranthisasin has a great idea, let the local bands take over the music there. We can all watch as their "paltry" amount of money becomes they were getting, and we were happy to pay, goes away. It'd be better for the businesses anyway, get some fresh music, and the local bands get paid. It's a win-win for the good guys, and many nights without dinner for the PPCA.

This is simply so outrageous that every single business in australia should immediately cancel their subscriptions. Put the PPCA out of business in one swoop. Gyms can simply distribute playlists to members taking classes and let them acquire it however they like. Bars can go back to the days of live entertainment, boycotting the record companies and restart the lost art of working musicians.

If I owned a cafe I think I would opt for a live guitar player or some type of musical artist! If this turns out to be a law maybe local musicians will find a lot more business. I live in the U.S. but I know that the music industry is becoming ridiculous about trying to make money...
Hopefully live entertainment of original music becomes more popular out of all this greed!

"... the amount they currently pay is extremely low and doesn’t fairly compensate the record labels,"
That is so unfounded and subjective it's not even humerous. Yeah, it's probably fairly low to the gain-goal that the damned labels are trying to grab. They are not even considering the economics of these businesses when calling it an "extremely low" amount, only through speculations and failing estimations.
"... but if a restaurant’s licensing tab goes from $125 to $19,344 I’ll be amazed if any of them continue to play music, and if they do it’s certain to be added to the price of a customer’s meal (maybe there ought to be a music free option, where if you wear earmuffs you don’t have to pay the fee)."
I would just ignore the background music entirely as it often doesn't suit my musical tastes. I do hear it, but that does not mean the businesses should pay for it.
“The rates we have historically charged are barely nominal and we are looking to establish a fair return,”
Typical statement from the utter ignorance or neglect of actual economic reasoning.
“Artists are entitled to earn a fair income from their efforts and they should not have to subsidize a profitable industry .... Where music is used to add value, as it clearly does in the fitness sector, it should be recognized and artists properly rewarded. Music should not be considered as something that should be handed over for free, or next to nothing.”
This stupid argument again; most artists that these industries represent are basically gaining jack and without adaptation in this era, these industries are becoming no longer profitable. That's the bloody reason for these bloody price hikes. The last sentence is hypocrisy, as it now considers its own fines to be next to nothing.
All they are basically doing is using stupid and impractical estimates.

These business consumers of music should band together to create their own licensing group for Indie music.
They should all boycott the oppressive major labels and insure their revenue is LESS (ideally 0) than it was under the old system. By not playing their music they will give it less exposure. By playing Indie music they will promote the alternative.